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Are Oil Markets Immune To US Shale?

Are Oil Markets Immune To US Shale?

Posted: Fri 10 Nov 2017, 21:37:43

by AdamB

Oil prices pulled back slightly following the release of the Baker Hughes rig count report, but geopolitical risk still remains, and with the assumption that OPEC will extend its production cut deal, oil bulls are very much alive and well. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, November 10, 2017 Oil prices showed some weakness mid-week on news that U.S. oil production jumped, but benchmark prices firmed up on Thursday, putting WTI and Brent on track for their fifth consecutive weekly advance. Oil prices are closing in on the longest streak of weekly gains in more than a year. OPEC revises up expectations of U.S. shale supply. OPEC released its annual World Oil Outlook this week, in which the group dramatically upgraded its expectations for U.S. shale. OPEC sees U.S. shale output ballooning from 5.1

Re: Are Oil Markets Immune To US Shale?

After what has happened to the world oil market since 2014 this article is at best short sighted and at worst pure sophistry.

Re: Are Oil Markets Immune To US Shale?

Posted: Sat 11 Nov 2017, 07:16:05

by GoghGoner

Yes and no -- the oil futures curve is in the rare state of backwardation. That means that traders are counting on supply coming online to lower prices over the next year -- they are counting on US shale to increase production. It also means that currently the fundamentals are weighted on demand being greater than supply -- that means that inventories are falling. I feel we are at a crossroad with oil prices. Stay tuned.

Re: Are Oil Markets Immune To US Shale?

Posted: Sat 11 Nov 2017, 13:46:06

by ROCKMAN

The complexity as I see it is the dominance of consumer competition for the oil supply how ever large or small it might be. And that's primarily a function of the global economic health. Right now lower oil prices pushed producers to bring on reserve capacity to increase cash flow. Thamt should be improving global economic vitality...eventually. At some point producers will generate enough cash flow to reduce production. When? No idea what that tipping point might be. Or natural depletion reduces production rates. No idea when that tipping point might be either. And, again, adding to the complexity is the lag times involved.

Five oil market myths that need dispelling

Posted: Tue 09 Jan 2018, 20:11:38

by AdamB

The oil market has come to be defined by several narratives over the past couple of years: market rebalancing, OPEC versus shale, Russia’s delicate relationship with OPEC, OPEC’s conformity with production cuts with the latest deal extension running to end of 2018 and shale’s resilience to lower prices. But these frameworks have created a narrow ideology that could harm the way producers participate in the oil market this year and beyond. Myth 1: OPEC’s exit strategy means exit The idea that the 24 producers who came together and struck a deal to cut production by 1.8 million b/d in November 2016 are somehow going to ‘exit’ the alliance later this year is misleading. There will be no exit when OPEC, Russia and other non-OPEC producers decide the market has rebalanced—based on OECD stock levels reaching their five year average — rather a continuation of the grand alliance